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Thursday, January 23, 2014

Yeshiva University still reeling from $100m loss in Madoff scandal

More than five years after financier Bernard Madoff was
arrested for masterminding the largest Ponzi scheme in United States history,
Yeshiva University continues to reel from its $100 million loss, Bloomberg News
reported on Wednesday.

According to Bloomberg, the New York-based university has
warned its budget deficits may get worse, and it failed to produce a financial
report on time for the year ending June 30, 2013 – prompting Moody’s Investors
Service to cut the school's rating to B1 this month.

That makes Yeshiva "the only university with an
endowment of more than $1 billion that [Moody's] ranks as junk," Bloomberg
noted, adding that Yeshiva’s mark in 2008, prior to the Madoff scandal, was the
third-highest grade.

Moody's said that the university has had trouble controlling
operating costs and has delayed implementing system-wide accounting practices.

It has also angered faculty by introducing salary freezes at
a time when its president, Richard Joel, earns well more than $1 million per
year. Joel did, however, agree to a symbolic $100,000 pay cut.

Yeshiva's annual deficits totaled hundreds of millions of
dollars from 2010 to 2012, according to Bloomberg News. In 2010, its deficit
was $107.5 million, while in 2011 it stood at $46.7 million and in 2012 it was
$105.9 million.

Madoff, 75, who stepped down from the Yeshiva University
board, is currently serving a 150-year prison term for the $65 billion scheme
that affected some 4,800 clients, including private clients, numerous Jewish
educational institutions and non-profits.